Billionaire Asda owners buy 350 petrol stations and 1,000 shops in £2.27BN deal: Issa brothers who made their fortunes running petrol forecourts across Europe expand their growing empire
- The companies hope to make synergy savings of £100 million from the deal
The billionaire brothers who own Asda have snapped up 350 petrol stations and 1,000 shops in a £2.27billion deal that will see their already growing empire expand in size.
Asda has bought its sister business EG Group’s UK and Irish operations. The deal puts an end to months of speculation about the future of the two firms, both owned by the Issa brothers.
The supermarket’s co-owner Mohsin Issa, who also co-founded EG Group, said the deal will let him offer ‘Asda’s highly competitive fuel’ to even more customers.
The companies hope to make synergy savings of around £100 million from the deal over the next three years, largely through the combined group’s size.
It did not announce any job cuts but did not rule them out.
The self-made billionaire Issa brothers, Zuber and Mohsin Issa
Asda has bought its sister business EG Group’s UK and Irish operations for £2.27 billion, bringing another 350 petrol stations into its portfolio (stock image)
The billionaire Issa brothers and the rise and rise of EG Group
1970s – Mohsin and Zuber Issa’s parents arrive to the UK from Gujarat, India, and the brothers are born not long afterwards in Blackburn, Lancashire.
They work at their parents’ petrol station before it closes.
2001 – The brothers buy their first filling station in Bury, Greater Manchester.
2015 – Private equity firm TDR Capital acquire a 50% stake in their Euro Garages chain.
2017 – Euro Garages buys EFR Group, a Dutch-based forecourt operator, and is renamed EG Group. The new company buys 1,000 garages from Esso in Germany.
2018 – EG Group announces it will buy 800 Kroger convenience stores in the US before buying 1,200 sites in Italy from Esso. Later that year it buys 97 fuel stations in the Netherlands and 540 from the Australian retailer Woolworths.
2019 – In another US expansion, EG buys 54 Fastrac sites in the US and 69 from Certified Oil.
2020 – EG becomes KFC’s largest franchisee in Europe after buying 145 KFC outlets in the UK & Ireland.
2021 – The Issa brothers buy Asda from Walmart for £6.8billion, bringing the supermarket back under British control.
The deal includes the acquisition of 350 petrol stations and more than 1,000 food-to-go locations, according to Sky News.
The combined company is expected to be worth around £10 billion, have revenues of around £30 billion and employ in the region of 170,000 people. The deal is also a way for EG Group to help pay down its debts.
The £2.3 billion it gets from Asda from the sale will be combined with the 1.4 billion dollars (£1.1 billion) it gained from a deal in the US.
Taken together, these payments will help reduce EG’s reported £7 billion debt pile.
Its net leverage will fall, meaning the amount of debt it has will be less than five times higher than its earnings before interest, tax, depreciation and amortisation (Ebitda).
But the GMB union has previously said the deal risks lumping part of that debt on to Asda, which already owes around £4.7 billion.
There had been speculation of a tie-up between Asda and the EG Group since just after the Issa Brothers bought the supermarket chain for £6.8 billion in 2020.
They swooped on Asda after former owner Walmart’s plan to sell it to Sainsbury’s was blocked.
Stuart Rose, who chairs Asda and EG Group, said: ‘Asda’s acquisition of EG UK and Ireland will create a consumer champion like the UK has never seen.
‘Throughout my career in retail one thing has always been true – that meeting the evolving needs of customers is the route to growth.
‘This transaction is all about driving growth by bringing Asda’s heritage in value to even more communities and accelerating the growth of its convenience retail business.’
Mohsin Issa said: ‘Asda is committed to saving customers precious time and money across their shopping baskets and on the forecourt.
‘The combination of Asda and EG UK&I will be positive news for motorists as we will be able to bring Asda’s highly competitive fuel offer to even more customers.’
The Blackburn-born Issa brothers were brought up in a terraced house after their father came to Britain to work in the textiles industry.
Their woollen mill worker father Vali and mother Zubeda came from India ‘with nothing’ and were living in a two-up, two-down terraced house on Balaclava Street in Blackburn when Mohsin and Zuber were born in the early 1970s.
By 2019, the brothers owned Europe’s largest forecourt operator, formerly known as Euro Garages, which had reported revenues of more than £17.9bn
In 2021, the brothers bought supermarket chain Asda from Walmart for £6.8billion (stock image)
Their first experience of business was selling petrol from their parents’ filling station, where they would have their big idea that would revolutionise the industry and make their millions.
They took a lease on a local garage with their combined savings of £5,000 and in 2001, the brothers founded Euro Garages with a single petrol filling station in Bury, Greater Manchester.
The brothers struck franchise agreements with brands including Starbucks, Subway and KFC, before embarking on a buying spree to snap up sites that had previously become vacant.
TDR Capital – a London investment firm behind We Buy Any Car and David Lloyd gyms – bought a 50 per cent stake in EG Group in 2015. The Issas retain the remaining 50 per cent.
By 2019, they owned Europe’s largest forecourt operator, formerly known as Euro Garages, which had reported revenues of more than £17.9bn.
This prompted a debt-fuelled buying spree that saw the brothers buy thousands of new sites and expand into other 10 countries around the world.
In 2021, the brothers bought Asda from Walmart for £6.8billion, bringing the supermarket back under British control.
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